Maybank KE sees pick-up in deal flow

Interest returning: Chong (right) posing with Maybank Kim Eng Singapore CEO Harmeet S. Bedi after a media briefing at the event.

SINGAPORE: Maybank Kim Eng, the investment banking (IB) arm of the Malayan Banking Bhd (Maybank) group expects to see a pick-up in deal flow this year with 30% of the pipeline likely to made up of deferred deals from the year before.

Chief executive officer Datuk John Chong said the firm was starting to see many companies across the Asean region coming back to tap both the debt and equity markets after a subdued 2016.

"Interest is coming back and the pipeline is healthy," he said at a press conference held here in conjunction with the Invest Asean Singapore conference organised by Maybank Kim Eng.

The transactions, both new and deffered,  will be varied in nature  and will include all IB activities such as equity financing, block placements and rights issues. 

Improved economic conditions and growth momentum in the Asean region which should spur activities especially in the infrastructure  and consumer segments  are lending support to such optimism, Chong said.

Citing figures, he said Maybank Kim Eng expects the Asean-6 namely Malaysia, Singapore, Indonesia, Philippines, Thailand and Vietnam to grow by 4.8% this year from an estimated 4.6%  in 2016 backed by trade recovery and higher commodity prices. 

Year-to-date, Maybank Kim Eng has been involved in three IPOs in the region including Malaysia's Ecoworld International's US$586mil IPO. 

About 40% of the investment bank's income currently comes from Malaysia with the remaining from across the region. 

Chong also expressed hope that more trade could be done within the Asean region itself. 

"In 2015, intra-Asean trade made up about 24% of the region's total trade and this number has remained relatively unchanged since 2007."

He said Asean's resilience to external headwinds could be further improved if intra-Asean trade was strengthened. 

"I would like to see more intra trade within Asean, it's not just about the governments, it's also about the private sector and the corporates, we want Asean multinationals," Chong said.

Commenting on Malaysia specifically, Chong pointed out that recent investor interest was apparent. 

"For instance, in the last three months, net inflow into Malaysia totalled RM3.1bil, I don't think it's hot money, I think it's due to fundamentals and attractive valuations."

He said he did not discount the fact that the stock market's benchmark index, the FBM KLCI could reach 1,800 points earlier than what Maybank Kim Eng has predicted, which is by the end of this year. 

At last look, the index was at 1,754.67.

Chong however cautioned that there still remained uncertainty in markets stemming largely from the external economic and political environment. 

Meanwhile, Maybank Kim Eng Singapore CEO Harmeet S. Bedi who was also present at the press conference said the Singapore unit was looking to grow its debt market business in project financing and syndicated loans. 

"On the equity capital markets front,  we are confident of building on our recent momentum."

It executed two rights issue exercises and an IPO last year. 

This year's Invest Asean Singapore event saw a total of 49 corporates from the region with a combined market capitalisation of US$129.7bil.